The Lloyds Bank Spending Power Report for February saw confidence in the state of the economy rise by a total of 21 points from this time last year to 130 points, the highest level since the survey began in November 2010.

The UK consumer view of the country’s financial situation continues to improve, with just 27 per cent feeling that it was ‘not good at all’, the lowest score since the survey began and a drop of 16 per cent from this time last year.

Sentiment towards the housing market is also on the rise, with 45 per cent of people saying it was ‘excellent’, ‘very good’ or ‘somewhat good’, the most positive sentiment seen to date. This compares to just 25 per cent this time last year.

Patrick Foley of Lloyds Bank, said: “With the pace of spending growth on essentials now more in line with wage growth, pressure on consumer wallets continues to ease. Meanwhile, the UK economic backdrop continues to improve, supporting ongoing gains in consumer sentiment.

“Taken together, rising confidence and the prospect of further gains in employment and wages points to the greater capacity of consumers to undertake discretionary spending.”

Confidence in Britain’s jobs market is also on the up, with 25 per cent of people viewing the employment situation as ‘not good at all’, a 14 per cent decrease from this time last year and a significant decrease from 56 per cent in February 2012.

However, the improvement in consumers’ sentiment towards their own personal finances remains more muted, dipping one percentage point this month with 56 per cent saying it was ‘excellent’, ‘very good’ or ‘somewhat good’.